“Live Nation Part 2” – Will Ownership Consolidation Ruin EDM?

We’ve seen this movie before: large media company enters growing, now profitable music scene. Large media company buys up all the smaller regional operations it can get its hands on. Now that smaller companies are together in one happy music pool, large media company presents pool to advertisers and marketers. Large media company soon cashes out of the conglomerate it created at handsome profit, walking off into the sunset.

Dear electronic dance music community: this is the situation at your breakbeat, bass-filled, trancy, dubstep-doorstep. Your community, your music, your culture — one that has been dismissed by corporate America for over twenty years and relegated to underground basements, clubs, and warehouses — has suddenly become, popular. Really, really popular.

Of course, this is not news to you. You already know that superstar DJs Skrillex, Tiesto, Deadmau5, David Guetta, Afrojack and the like now command million dollar fees and fuel an increasingly lucrative dance festival scene that spans from Brooklyn to Berlin. You’ve even heard the influence of the awkwardly-termed genre “EDM” creeping into top-40 playlists. What is news is who is suddenly paying attention: Wall Street.

Leading the charge among this pack of well-heeled, wannabe dance investors is Robert Sillerman, one of the central figures who brought large-scale commerce to rock music through consolidation of independent radio and concert promoters. In 1997, Sillerman’s original music media venture, SFX, was sold to a Texas radio firm that was eventually acquired by Clear Channel. Eight years later, Clear Channel went on to found Live Nation.

And what did Live Nation and its new bedfellow Ticketmaster exactly give us? Higher ticket prices. Corporate boxes. The rock and roll V.I.P. suite. A brand new vocabulary — “building facility cost,” “processing fee,” and “convenience charge.” A monolithic stage that only a select group of musicians are able to perform on. A music culture that was suddenly about “getting the right ticket,” promoting an ethos of exclusion rather than inclusion (something the dance scene, with its legions of independent promoters, has thankfully turned on its head).

Now that this 64-year old media mogul, who has a decorated financial record ranging from stakes in American Idol, So You Think You Can Dance, Graceland, the Elvis Presley estate and a failed vacation resort in the Caribbean, wants to give his formula for entertainment success another spin, we think the dance community, artists and music lovers should ask one simple question: why? When questioned recently by the New York Times, Sillerman replied, “The fundamental premise that combining businesses that are inefficient and making them more efficient always makes sense.”

Inefficient? Dance music is as robust and relevant as it has ever been. When one also considers that the entire music industry has been in a fight for its survival over the past decade, we feel that anyone who labels dance music “inefficient” is unlikely to know the difference between the Grateful Dead and Deadmau5. Indeed, festivals like Electric Daisy Carnival in Las Vegas, Ultra in Miami, and Movement Electronic Music Festival in Detroit sell out at lighting speed, often without even announcing the headlining artists.

Music creators and fans, therefore, have every right to be suspicious when a multi-millionaire investor like Sillerman enters a healthy music community and claims, “I’m also confident that we will create a better experience for the fans. Can we monetize that? If we can, this will dwarf the first SFX. That’s the whole game.”

We at FMC believe that the healthy dance scene, which now informs a range of music styles, is much more than a “game,’ but rather an art form and community that functions beyond the sole economic confines of profit and loss. Dance veterans like Pasquale Rotella, Founder of Electric Daisy Carnival, are already skeptical about the cash grab that is going on. “You don’t want this to turn into what the concert business is today … where you just sell people tickets and they come to the show and sit in their seat,” he says. “There’s not a lot of soul behind that.”

At the end of the day, a little disorder and inefficiency in dance may actually be a good thing, if it means maintaining diversity in ownership. Some industry veterans argue that DJs, promoters, and dance pioneers must turn away from the corporate money that is now awash in the EDM community. While we love it when artists get paid, if the compensation is tied to interests with a track record of reducing music diversity, increasing ticket prices, and a sketchier experience for consumers, the dance community should proceed with caution.

It’s already happening. Sillerman in vegas for the EDM Biz conference. No one has yet to report that he did this the last time at the Palms casino when we rolled up all the concert promoters. This time however, he has a stiffer challenge. That is live nation. The company he started is now competing for their share to take control. Moreover, there is another take on this. Who wins and who looses. Those promoters who were in the game but not successful or only marginally successful are already finding themselves increasingly pushed out. The reason for this is Sillerman, Live Nation, and others are pushing for music events to be put into bigger venues. When your someone trying to do something in podunk Ohio this presents a challenge. In the end those who really stood for community, and really were trying to make a go at something have been pushed out. I think it is a true travesty within this subculture that people are profiting off of a cultural product. A community created this scene and now a few people at the top are making millions off of it. Yet, these same people employ a large volunteer task force. There is enough money to go around and keep ticket prices low — this business has and will increasingly become oriented towards who can ‘out smart’ or ‘out exploit’ who rather than hard work or good will. The real question is if the EDM community will continue to lie in front of the tracks and defend these modern day robber barons.

I also love the fact that, after cheerleading for piracy for a decade straight, now the FOMC is concerned about….musicians becoming so successful they’re attracting investors. You guys have a very strange sense of priorities over there, but I appreciate the surrealism, makes life fun.

The EDM concert promotion was “inefficient” as a whole…if by that he means people were not making real $$$. Most of the guys who put on EDM shows make little $$$…most have day jobs and do promotion on the side because margins are so thin especially now with the oversaturation in many of the markets. Many of these guys work with Donnie and they all lose big Only a few guys have been able to return a profit–React, LED, USC, etc.

It seems “efficient” from the outside looking in though. You see all these articles and press about the popularity of dance music how EDC + Electric Zoo always sell out. If you are a promoter in a primary or secondary market and you’re only doing your own independent shows (aka not doing talent buying for other local clubs, doing event marketing for brands, etc) you are scraping by. Anybody who says otherwise is just not involved in the business. sorry to reign in on your parade

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